Friday (June 16) saw the EOA embark on the first leg of our UK tour to uncover the evidence of employee owned businesses and their contribution to the economy for The Ownership Effect Inquiry.
With the support of our partners, The John Lewis Partnership and The eaga Trust, our first of seven hearings explored productivity and growth in employee owned businesses from the perspective of SMEs and big businesses; leaders and employees.
Hearing the evidence directly from those that own and run these businesses was powerful and compelling, presenting our Panel of business experts with new insights that they were able to challenge and explore.
As I reflected on this first hearing, there were three key things that stood out for me.
Firstly, it was evident that the culture in employee owned businesses plays an enormous part in shaping the business, alongside supporting the employee ownership. We heard that these are businesses of people where there are levels of particularly strong engagement, heightened collaboration and inclusivity, and exceptional levels of sharing and transparency. All of these qualities drive a high level of trust, commitment and innovation from the teams.
Secondly, I learned that these businesses were still leadership driven, with clear structures and processes that helped harness the culture in an organised and professional way.
And what I found particularly interesting was the extent to which most of the companies we heard from have a different view of targets and measures. Profit is fundamental but the key priority is profit in the longer term; profit that delivers sustainable growth and that supports high quality and innovative work.
The hearings are also designed to explore any challenges or gaps in the sector, so it was enlightening to hear some of the challenges the sector faces – particularly around its ability to measure performance against competitors – although this seems to be a challenge for many privately-owned businesses and especially SMEs, as well as remaining a challenge for the EOA as we seek to track growth in the sector.
An interesting area we discussed was financing employee owned businesses, the different attitudes to debt and what appeared to be a possible challenge of access to funding. It was clear that whilst there is an appetite to grow, this is a focus on sustainable growth over the longer term, mainly through organic activity. I was left wondering how we might stimulate and encourage more growth of existing employee owned businesses, especially at a time when the UK economy would benefit from a greater drive for growth?
I was struck by the observations of some of the Panel, who clearly saw the opportunity that employee ownership presents in terms of scalability: that these businesses seem to be able to grow while still retaining their strong ethos, often derived through family ownership or founder ownership, and which also offer opportunities for succession and exit planning.
Finally, based on the expertise and knowledge of some of the Panel members, there is clearly an opportunity to use employee ownership to attract and retain talent; given it is such an attractive proposition for millennials.
With six more hearings to attend, I am terribly excited to see and hear what further evidence and insights we collect on the employee ownership UK tour. Keep watching for our next update!
Deb Oxley, CEO of the EOA
The Ownership Effect
Inquiry panel hearing 1 – June 16 London BEIS
Chair: Baroness Sharon Bowles
Subject: Productivity and Growth
Panel representatives from the following businesses and institutions:
- Institute for Family Business
- Small Business Research Centre, Kingston University Business School
- Grant Thornton
- Chartered Management Institute
- ScaleUp Institute
- Baxendale [Adviser to the Panel]
- Federation of Small Businesses
- Institute of Directors
- A G Parfett & Sons Ltd
- Legal & General Investment Management
- British Chambers of Commerce
- ICSA: The Governance Institute
Participants from the following employee owned businesses:
- Mott MacDonald Group Ltd
- Stride Treglown
- Arup Group Limited
- Quintessa Limited
- Tibbalds Planning & Urban Design Ltd
- Useful Simple Trust
- MJP Architects Limited
- Saxton Bampfylde
- Make Limited